Rideshare and Gig-Economy News

Why you should NEVER chase a surge!

There are some truths to the theories you have probably heard before, that surges are only to re-direct drivers to where either platform you are driving (Uber or Lyft), want more drivers. If you think about it, makes total sense. Lets say there is a NBA basketball game going on in your town on a given night, I’ll use my city as the example, for this example the Los Angeles Lakers are in town playing the Denver Nuggets at 7pm MST. Last for this example lets say 30% of the people attending the game used either Uber or Lyft to get to the game, and that the game is completely sold out.

Next, we find out after everyone has arrived that 50% of the attendees who used Rideshare to get to the game used Uber and the other 50% used Lyft. Remember, I am making these numbers up for this example, and as you can see I did not address people who take the train, taxis, walk from downtown lofts, etc. For this example I am just keeping it simple and to Rideshare.

If the game starts at 7pm, then we have a good idea it will be over around 9:15-9:45 (give or take). We can make an educated guess most people will go home after the game with the same Rideshare company they came in. Yes, there are the 5%-7% that may check rates on both, but usually people just want to beat the rush and use the same one on the return.

Here is the catch, if the game is not even close in score you will have people leaving in the last 5+ minutes, again to beat the rush. For this example lets say the score is tied 110-110 with 2 minutes left and only very few have started to leave the building. At this point people pull out there phones, open the Rideshare app they came in and put in their address to see if the rates are high, how long until a driver can be there, time left in game. They notice there are many Rideshare vehicles in the area and the price is relatively close to the cost it was to get there. So they shut the app and re-focus on the game. Now the network is starting to see action at the arena, so it starts the algorithm for “surge”.

The game is now down to 1 minute and 100 people are ready to get their Uber’s and Lyft’s, and in keeping this easy there are 25 Lyft’s outside and 25 Uber’s. The 100 people open the app, notice the price is rising, so they focus back on the game and most don’t call for their car yet. A few do and start making their way out, now others in the arena are starting to check how long of wait times and pricing but still only a few are pulling the trigger. Now drivers for both platforms see the surge growing at the arena and start driving there because the rideshare platforms are showing a growing surge.

Keep in mind this surge is not even real at this point. Opening the app and having your location on in the app, which you need to do to use Uber and Lyft, has the network let drivers know there are 300 people trying to hail rides, when really maybe only 50 are actually pulling the trigger and requesting a car then. The app being open even if not ready to call for your ride yet, shows as a surge. This is very deceiving because people have gotten wise to what the cost should be, or what they are willing to pay. So they leave the app open and keep checking until the rate is one they are willing to pay. Once it is they call for their ride.

Meanwhile drivers have all made their way over to the arena which is showing 250%-300% on surge. This FAKE surge is caused by people having the app open waiting for a lower price.

I can’t even tell you over the years how many drivers have asked me:“If I am right at the arena and the surge is 250%-300% how is it possible I am not getting a ride at a high surge amount”. The answer is simple, because it is not real. Uber and Lyft, want you to drive to where they are showing surge because they want to have more than enough vehicles when the time comes that everyone does pull the trigger and want their ride home. Many drivers get over there and the surge is still 250%-300% and after 10 minutes they see a request that shows 75% surge, so how could this be? This happens because people still have the app open but only so many are actually requesting the ride now.

If you have been doing rideshare for years like I have you know this happens when the bars are nearing closing time. Here in Denver, the airport has a terminal and a train that runs to 3 different concourses. Concourse ‘C’ is the farthest away from the terminal and when planes land, and people turn on their phones it surges at the Concourse, the problem here is NO vehichles can get to Concorse ‘C’. What is happening here? Simple the pilot told the passengers it is okay to turn on electronics and such, everyone turns on their phone and boom 100+ phones with Uber and Lyft send a signal to the network saying all these people need a ride. This is a dead giveaway because not one of these people needs a ride from this location, you can’t drive there. The plane pulls in and the passengers take their time exiting, then have to walk to the center of the Concourse, then wait for the train, then take the train to the terminal, then get their bags, and finally walk outside and request a ride 45 minutes to an hour after the surge showed.

We have ran tests on the bars near closing time, concerts, sporting events, etc. The airport is the dead giveaway here because, we see surges everyday at Concourse ‘C’ and ‘B’, that cannot be surges. In fact Uber and Lyft have tried a few times to fix this but to do so would require them not having the tracking on your phone they want.

So, are there real surges, of course and we have all encountered them and maybe even done well in the past. These companies are moving away from surging, or in Uber’s case have moved to the sadly dubbed “Penny Surge”. A snowstorm or airport being shut down due to weather, and things of this nature can cause true surges. Usually a surge is nothing more than Uber or Lyft trying to trick you into going where they want you, maybe they are low on vehicles in area or an event is about to let out and each company wants more cars there than the other so the can be the lower price.

The best practice is to drive where you are, even if you see a huge surge that is tempting you. Think about it, everyone is moving towards the surge, you are parked waiting outside a part of town with restaurants you will get a ride quick and not have to deal with the traffic and hassle of events letting out. Just stay in place, pick up your passengers, take them to destination. You’ll even pick up your next ride quicker while drivers are trying to make their way back from the fake surge, or minor surge. Also if you are like me and drive a lot, you will actually just be in the right place at the right time and get a real surge here and there, often while others are chasing the Uber and Lyft network created surges.

Save gas, learn your area inside and out! Know whats going on in town, and stay where you are. You will always do better, I’ve been doing this almost 6 years for both Uber and Lyft and have not chased a surge in almost 5 years. At the end of my night I have made more money than my fellow drivers out there stressing and chasing what isn’t real.